Ridgecrest city council heard a presentation on the state of the sewer infrastructure and recommendations to increase sewer system rates for the first time in decades at its meeting Wednesday night.

Mark Hildebrand from Red Oak, the city’s consultant on the matter, educated council and a concerned public on the fact that the city needed to raise its rates in order to meet operational needs and better prepare for a replacement of the city’s Wastewater Treatment facility and the replacement of its sewer line infrastructure.

“The WWTP has exceeded its final life span, and is in need of significant repairs,” Hildebrand said.

He said based on consultant studies, it was nearing the end of its operational life and the maintenance on the plant was reactive rather than preventative.

“If you continue to defer, there is a risk of major failure, resulting in fines and will take decisions out of city hands and into regulator hands,” Hildebrand said.

He said the rate increase needed to be 150 percent within three years to meet reserve and revenue expectations.

Business rates would be set based on a fixed overhead cost and a variable based on the volume of wastewater produced by the business or establishment.

Council turned to discussion on how to initially minimize the impact to residents in the first three years while also meeting the goal of a 150 percent increase in the first three years.

A consensus was made to send out a public notice with rates set a a 60 percent increase in 2014, 50 percent increase in 2015 and 40 percent increase in 2016, with 3-percent increases in both 2016 and 2017.

For single family homes, that equates to $14.15 in 2014, $21.22 in 2015, $29.27 in 2016, $30 in 2017 and $31.52 in 2018.

The council voted 5-0 to issue a notice for a public hearing on June 5, with flyers going out in the mail to all property owners.

Hildebrand said that most municipalities generally increased the sewer rates gradually over the years appropriate to the Consumer Price Index as a way to adjust the cost of doing business.

Comparatively, he said other municipalities had higher rates to accommodate their own sewer services but stressed that it was not a justification to raise the rates on that notion alone.

Hildebrand recommended a 100 percent reserve fund for overall operations based on one year's operational costs, or $1.45 million. He also recommended a $2 million reserve for emergency capital improvements or repairs.

Based on the advanced age of the sewer system piping, Hildebrand also recommended begin saving up and planning to spend $800,000 a year.

If the city did not act on raising rates, the revenue for the city's wastewater treatment fund would decline steadily over the next five years, Hildebrand said. Doing so would make it harder for the city to issue bonds for a new treatment facility.

Page 2 of 2 - He pointed out Red Oak had taken into account the city's 30-year payment plan of the $4.2 million loan the city borrowed from the Wastewater Fund when the consultant made its revenue projections.

Various members of the public cried foul or expressed concern over the timing of the increase, or the amount needed for the wastewater treatment facility.

Stan Rajtora called into question the need for a 100 percent reserve fund, especially when the city was hovering at less than 10 percent for its general fund reserve.

“I saw no reason to keep it at 100 percent and it seems like a total overkill,” Rajtora said. “All we’re doing is putting stress on the citizens.”

Vice Mayor Chip Holloway called it a necessary evil and Hildebrand followed up by saying that technically it was an indicator of strong financial health when it came to float bonds for a $46 million treatment facility.